According to the Manhattan District Attorney's Office, Gao used a decompiler to access models he was not permitted to view and then sent those and other Two Sigma data to a personal e-mail account. According to Two Sigma, which has also sued Gao, he planned to use the information, either at a new job or to start his own business in China.

"The protection of trade secrets, such as computer source codes and trading methods, is critical to building and maintaining financial expertise," Cyrus Vance, the Manhattan D.A., said.

"Two Sigma takes the protection of our intellectual property very seriously," Kelly Howard, a spokeswoman for the firm, said. "We became aware of potential felony criminal activity of an employee, promptly informed the Manhattan District Attorney and terminated his employment."

From the current issue of

We are accustomed to splitting trading into technical and fundamental buckets. Both involve crunching data; one set includes market fundamentals and the other pure price data. Alternative data is a third bucket that is gaining traction.